The buzzwords in the industry today are IIoT, Industry 4.0 or digitisation. These new technologies are bringing in a tsunami of change in the industry and are driving industrial growth. Fierce global competition, demanding customers and the scorching pace of technological advancements are transforming the business landscape.
Drivers of change
Though it is clear that digital transformation is critical to success, people resist change. To accept a new way of doing things takes a lot of time and convincing. Statistics reveal that approximately $1 trillion is lost annually due to sub-optimal operating performance; only 5% of companies have an in-depth IIoT strategy for improving plant equipment, reliability and maintenance. IIoT provides distinct opportunities to optimise the entire value chain.
Primary function of IIoT
ARC defines IIoT as the transformation of industrial products, operations, value chains and after-market services that is enabled through the expanded use of sensors, digitisation, networking, and information systems. The primary function of IIoT is to create connected ecosystems in factories and plants that allow data to flow across the digital enterprise and to the cloud. As industrial companies make the transformation into digital enterprises, they will be able to adopt and implement a range of technologies like predictive and prescriptive analytics, the digital twin and operational intelligence. The clear trend is to move connectivity and intelligence to the edge, where a new generation of smart sensors and intelligent devices will discover, access, aggregate and analyse operational data.
Disruption by latest technologies
Today, there is an increasing recognition among industrial companies that these new approaches are disrupting established business models and to keep pace, it is imperative to adopt these new strategies and processes. Some companies already have a robust strategy for digital transformation alongwith a realisable roadmap. Those who are still wavering in their decision to digitise need to look around, examine successful implementations and then plan their moves.
Adopting digital processes
I believe that no two digital transformations are the same as each one traverses a different path. Networking is an important aspect of digitisation because 80% of the data, that companies need to run their supply chains, is locked up in partner systems. The power of the internet helps converge the physical and financial supply networks and provides visibility.
The main reason to go digital is to handle the challenges of bringing products to market faster while ensuring that processes are aligned for aggressive product launch goals. Products across all industries are becoming more complex in terms of functionality, built-in intelligence, conformance to regulatory and environmental issues and the need to offer more innovative features. Thus, they are becoming more intelligent. As companies are competing in a world of constant transformation, unless they progress on the digital process trajectory, the race cannot be won.
This is a guest editorial feature by G. Ganapathiraman, Country Manager, ARC Advisory Group India